Bon Jovi, known more for loud music than acute marketing sense, is profiled in a recent Wall Street Journal piece, Battling Music Pirates. At first glance, it’s straight out of Permission Marketing. The band is offering listeners who buy a copy of their new CD a chance to enter their serial number online and get concert tickets, fan info, etc.
The good news is that the music business is starting to see that the relationship with the fan is worth more than the profit on a single CD. Last year, for the first time in more than five years, no record in the US sold more than 5 million copies. That means that reliably reaching a small audience who WANTS to hear from you is a far better strategy than attempting to sell everyone in the world.
The bad news is that the band is “battling.” That it views fans as the enemy. Why should I go to the site and register my email address and a lot of personal information? What’s in it for me? Is the access to tickets just bait, or is it really a reward for my long-term attention and cash?
Here’s the challenge–we need to remember who we’re working for. We’re working for the people who pay us (with attention.) Bon Jovi is making a really brave first step. But they have to take their time. Not get greedy. Not start spamming those fans who take a step and enroll.
September 17, 2002
A lot.
It’s called SherpaBlog. Anne Holland is the sherpa. She’s awfully smart.
September 7, 2002
…the rank and file gets nothing but the short end of whatever stick is available. Whether it’s layoffs or excessive CEO pay, the hardworking folks that really do the work end up with the shaft.
I had lunch last week with my old friend Jim. I hadn’t seen him in two years, and it was a great chance to catch up. The food was great. The rest of lunch was pretty dismal.
Jim works for a big New York conglomerate. He’s 50 years old. Got another 25 years of good work left. And he hates his job. He’s stuck. He’s doing exactly what he was doing the last time we had lunch. He spends most days counting how long before he can afford to retire—a number that, thanks to the stock market meltdown, just got a lot bigger.
Five years ago, Jim had a dream job, the sort we all envied, the kind we saw profiled in one magazine after another. Now, that very same job feels like a trap.
The big lie of the new economy is that everyone could live the life of an entrepreneur without actually being one.
We bought the idea that all the good stuff that people look for from an organization—job security, benefits, vacations, the safety of being able to blame your boss when things don’t go well—could be accompanied by the rush of fast growth and the heady feeling we get when the bureaucracy gets out of the way and we get to discover what we can really accomplish.
We lionized the 28-year-olds who were pioneering new products or launching new divisions. We envied the lucky (but not particularly skilled or risk-taking) middle managers who made a fortune with stock options. We called ourselves intrepreneurs, smiling because we were getting the best of both worlds.
Wrong. Very wrong. Wrong because we missed two big ideas.
The first idea is that big companies are fundamentally broken. Big companies are big companies because they’re very good at doing yesterday’s business. They can make (and sell) their stuff faster and cheaper than the competition because they’ve gotten good at making and selling their existing products.
The problem is that when the world changes (and it is changing faster than ever) being good at yesterday’s business isn’t just useless, it’s a liability. All those big companies are sweating now, because the infrastructure they built is about as useful as the Maginot Line—it’s obsolete. Penguins like cold weather. When it gets warm, they’re stuck. The finely tuned machinery they developed for one environment won’t work so well in a new environment.
The second idea is that the stock market has been broken for just as long. The stock market is a huge mass-psychology scam, dependent on the fiction that there will always be someone stupider than you, willing to buy those shares for more than you just paid.
A key part of this scam is the generally agreed upon principles that investors seek. At the center of those principles is the idea that big companies with predictable earnings are likely to continue to grow and thrive. This used to be true, of course, but in a chaotic world, it’s proven wrong every single day.
The bottoming out that we’re living through is a direct consequence of these two ideas becoming very clear to us at precisely the same time. Big companies can’t keep growing forever at 20% a year perfecting yesterday’s business, but the stock market didn’t want to hear about that. So the big companies, with the direct encouragement of the accounting firms, lied about their results (yeah, lied is a strong word, but that’s what it’s called when you don’t tell the truth).
All along, while we were giddy at the huge expansion we all enjoyed, we were missing the real point. And now we’re paying for it.
The other day, I took my son to see Steve Jobs give his annual keynote at the MacWorld Expo in New York. He sat transfixed for hours, amazed at the energy and insight and enthusiasm Steve brought to the podium. I mean, Steve was acting like he owned the place.
Of course, he does own the place. And that’s the most important lesson I think we can take away from the nausea of the last two years.
Apple introduces great products on a regular schedule. Contrast the magic of the iPod or dot Mac or Final Cut Pro with the sheer banality of most of what passes for innovation in big business. Other technology companies introduce services they expect to become profitable monopolies. Apple introduces things they’re proud of.
Steve isn’t trying to make the stock price go up. He’s not trying to keep his current infrastructure busy or please his dealers. He’s making stuff he believes in. He’s continuing the legend. It’s the happy coincidence of his ego and our needs.
Of course, that’s only true when it’s true. The rest of the time, Apple makes products that fail, that don’t excite, that don’t make a profit. For almost thirty years, though, there have been just enough wins to pay for the losses. He’s a hero. A model for millions.
What if everyone had guts like that? What if everyone reading this article realized that the point of our careers (2,000 hours a year, 50 years in a row, that’s 100,000 hours of work) isn’t to crank out yet another widget? What if, just maybe, we quit making stuff and started making a difference?
The giant secret of the new economy was this: entrepreneurs momentarily got a free (and fast) ride to wealth via the stock market. That connection is temporarily over, but the basic idea behind entrepreneurship is stronger than ever. In a time of rapid change, the best organizations are small and fast, and the people who run them have a chance to make an impact that will last.
It’s not a coincidence that one of the byproducts of the technology revolution is the death of the factory. With all the publicly available infrastructure (from cell phones to email to Kinkos to outsourcing in Thailand) there’s really no reason at all to build a big company any more. And since big companies are no more profitable than little ones, it’s the little ones that are most likely to spring up, make a difference and then (without tears) disappear, only to reappear some other time, some other place.
This is hard to swallow for a lot of people. We grew up with parents who read Time or Forbes, not Inc. Our role models weren’t crazed entrepreneurs, on a mission from god to accomplish something or go bust trying. We don’t see ourselves wearing those shoes. Why can’t the world just settle down and let us get some rest?
Alas, the world isn’t going to settle down. The desire for safety is understandable, but it’s being overwhelmed by Moore’s Law, by globalization, by competitive desire. I’m sorry if you’ve made it two-thirds of the way to retirement, but, alas, the world got crazy on us.
The dot coms that failed in a big way all had one thing in common—they tried to use money to insulate themselves from external change. They tried to buy success, to buy bigness, to buy stability. You can’t, no matter how big you are.
As long as you work for someone, you have no job security. As long as your company is public, your future is in the hands of others—people who are likely not as smart as you are. And as long as you follow the instructions of others, you won’t be fulfilling your destiny of really and truly making a difference in the way people live and work.
How much time do you spend every day worrying about how fulfilled and happy the CEO is? How much do you invest to be sure she’s got a secure job? Big news: your CEO spends precisely the same amount of time worrying about you.
I want you to do something for you. I’m begging you. It’ll only take a few minutes, but I think you might enjoy it.
Imagine for a second that you just lost your job. Further, imagine that the industry in which you’ve been trained and are working in has just disappeared.
What are you going to do? Are you going to go out and look for another job? A job at an Enron or a Worldcom? Or at a big bureaucracy with 100 people working in accounts payable and a budget for strategy consultants of several million dollars a year?
What if there were no choice… what if you had to start something? Anything. What would it be?
You don’t need a good idea to start a business—you can steal one. Find someone in another town, another state, another industry—and do what they’re doing. Once you get started, your original idea is going to be replaced anyway. Smart entrepreneurs don’t stick to the original business plan. You’ll realize that every day is another day closer to success, and changing the plan is part of the plan.
The best part of this exercise is when you realize that you are smart enough, motivated enough and focused enough to actually do this. That once you decide that you could actually run the place, you’ll realize that no other option is as satisfying.
Quit your job. Right now*. Stop doing something that’s crazy, risky and ill-considered. (Your current job is all three). Stop working for the factory and start building something that people will remember.
Here’s the crux of the matter: organizations where the people doing the work are the very same people who are making the decisions are more likely to succeed in the long run. Just about all the sins of American business (from environmental despoliation to accounting fraud) can be pinned on the anonymous bureaucracy. Entrepreneurs can’t be anonymous—it’s your decision, your policy, your work, your business—and so you’re fast and honest, or you’re out. There’s nowhere else to pass the buck.
Is it scary? Well, just for a second, consider the alternative. You could work for Motorola or Adelphia or even AT&T, always wondering when the company was going to downsize you at the same time you were busy doing whatever the boss asked just to be sure you’d be the last to be fired…
Sounds to me like running a tiny business is totally safe in comparison.
*Actually, you don’t have to quit right now. You could just decide to quit right now. One of the best parts of the no-infrastructure economy is that you can start in your spare time. Hey, it worked for eBay.
September 5, 2002
Alex noticed a funny sign on the door of our local Subway sandwich shop. On one side it encouraged you to buy a special meal, which included a large Coke, a bag of potato chips and a three meat sandwich.
On the other side of the glass, the same sign proclaimed that Subway was a proud sponsor of the American Heart Walk. Go figure. (At least they made it impossible to see both sides of the sign at the same time).
As contingency lawyers and Attorneys General start gearing up to attack the fast food restaurants for their contribution to the sorry state of American’s health, the real question is: Are we fat and slothful because McDonald’s made us this way, or is McDonald’s the way it is because we’re so driven to become fat and slothful?
I spent last weekend in the vast cultural wasteland that is known as Hershey, Pennsylvania.
This is the epicenter of cheap chocolate. More than that, though, it demonstrates a really important principle about design, style and the quest for the remarkable.
Hershey Park is roller coaster heaven. There are wood coasters, metal coasters, coasters that get you soaking wet and coasters for kids. If the point of an amusement park is to offer lots and lots of rides, Hershey Park has it nailed.
But spending even an hour at the park is fatiguing. It’s not just boring, it’s actually demoralizing. Part of this is due to the huge crowds, but hey, it’s a business and they make their money selling tickets, so they’re entitled…
More than ten years ago, Philip Crosby changed the world of manufacturing with his provocatively titled book, “Quality is Free”. The thesis of the book was that it’s actually CHEAPER to make stuff right the first time than it is to fix them later.
In other words, you can make a profit by making your product better. While this seems to be commonsense today, it sure wasn’t then. We were manufacturing junk, because it was fast and we thought it was cheap. The Japanese taught us that it was even cheaper to make stuff that worked.
Well, here’s the corrollary: STYLE IS FREE.
Let me give you some examples from Hershey Park:
Every ride has a few signs you’re expected to read before you get on. The signs are a necessary expense, but that doesn’t explain why they are so ugly. For example, every sign about safety is WRITTEN IN ALL CAPITAL LETTERS, WITH TIGHT LINE SPACING AND A UNATTRACTIVE, HARD TO READ FONT. Other signs are in gold, in green, in black. Every sign, just about, is different from every other.
The cost of making each sign attractive is precisely zero. Same amount of ink, same amount of wood. Yet if more people read the signs, injuries would decrease, lines would move faster and Hershey would make more money.
While we’re on the topic of signs, I did a count, and there are (this is true, you can check it out) more than 100 different typefaces used on official park signage. Standing on one spot in “Mining Town”, I saw more than 40.
It’s like there was a horrible accident at the type foundry down the road. Imagine reading a book or driving on a highway or operating a car that had more than 40 typefaces displayed simultaneously.
This decentralized, disrespectful method of communication quickly turns into NO communication.
The same sloppiness extends to the choice of foods served, the menu designs, the costumes worn by employees… on and on.
My favorite (hmmm, maybe not favorite) moment came just before we crawled away, defeated. In the midst of all the chaos, a six piece brass band (including a small tuba (a baritone) walked by, playing the theme from Hawaii Five O.
Why one brass band? Why here? Why Hawaii Five O? I have no idea.
In an earlier riff, I talked about my take on “Remarkable.” Remarkable is necessary to market today, because unremarkable products don’t get talked about, they just fade away. And the opposite of remarkable is “very good.”
Trying hard doesn’t make you remarkable. Doing a good job doesn’t make you remarkable. What makes you remarkable is being amazing, outstanding, surprising, elegant and noteworthy.
Hershey is actively spending money (million dollar rides and brass bands) trying to be remarkable, and they are barely ending up as very good.
There is no style at Hershey. It’s not that it’s BAD–there are plenty of examples of bad design that ended up being so distinctive it became good (McDonald’s, for example). No, it’s that they are lazy, or bureaucratic, or stuck. Hershey doesn’t feel like Disney. You won’t remember it after you leave. You won’t talk about it. You couldn’t describe most of the experience even if you tried. There’s no parallel construction to give you a mental map of what you just saw. No hierarchy of what’s important and what’s not. Nothing to look at when you’re not rocketing at a hundred miles an hour.
The funny thing is that this thinking is consistent. The hotel is just as ungupaatch (what a great yiddish word! It means all mixed up with no redeeming value) as the park. And the candy the company makes is boring, non-remarkable and distinctly unstylish. Compare this to the fictional Willie Wonka or the very real Scharffen Berger company.
Does Hershey make money? Sure they do. They’re still profiting from great timing in being first with a mass market chocolate bar at precisely the right moment, and profiting further from running TV ads back when TV ads actually worked. But both those moments are long gone, and it’s a downhill ride from here.
So what’s the lesson? If you run a website, does it look like Hershey Park? If you have a retail establishment or any sort of consumer experience, is it as deadening and boring as Hershey Park?
The Apple Store is the un-Hershey. Here’s a company with so much style, it occasionally gets in the way. But not at the store. At the store, you can grab any three square feet and use them as the DNA to make an entirely new store–and it would be consistent with the original. Just a glance at the store and you know where you are and what it means.
So what? I’ll tell you what. According to Steve Jobs, a huge percentage of visitors to an Apple store don’t own a Mac before they walk in… and do when they leave. The store isn’t just a place to exchange cash for computers… it’s a place to create a genuine emotional branding experience, one that lasts. It’s so cool, people come back with their friends.
Is the design, the lighting, the carpeting choice, the layout–all that stuff–expensive? Nope, it’s free. They had to carpet and build out the store anyway, and the cost is in the thinking and the guts, not necessarily in the fixtures themselves.
Try to imagine Hershey creating actual impact and nostalgia for their brand with Hershey Park. They may have saved a few minutes building the thing, but the complete lack of creativity, magic, imagination or excitment can’t help but bring the brand further down.
Disneyworld may not be your favorite place in the world (me either) but one incredible statistic tells the tale. Every year, more than 20,000 brides choose to have their wedding there.
Think many people got married last weekend at Hershey Park?
August 6, 2002
18 years ago, this was a thing. Obsolete now. Sorry
No, it’s not the only tonic the record industry needs (see below) but it sure is fun to listen to.
Please check it out:
zoomTone!
July 29, 2002
Jack Valenti wants to make you one.
There’s a long history (as my readers know) of oligopolies trying to use Congress to legislate against technology. It’s easiest to see how pervasive this is by looking at Federal Express, a notable exception to the rule. The fax machine took a huge chunk out of their business (followed by email) but they resisted the urge to get some powerful senator from Tennessee to pass a law stating that faxes should be taxed, regulated or banned. After all, think of all the American jobs that would be lost to this infernal hardware device!
The movie industry doesn’t have the guts Fedex did. The movie industry is charming, swarming, intimidating and leveraging every member of Congress to get them to criminalize the Internet. They have a three step argument:
1. We need digital broadband to the home to reach both educational nirvana and remain competitive worldwide.
2. There will be no digital broadband until Hollywood starts releasing movies in this format.
3. Hollywood won’t do this because of piracy! Look what happened to the poor shnooks in the record business….
In my previous note on Senator Hollings ill-thought-out bill on this issue, I pointed out that in our democracy, the point of the laws should be to protect all of us, not just a chosen few who happen to have an existing business (one that may or may not co-exist with new technologies).
Valenti’s arguments are nonsense. First, there are plenty of reasons we don’t have broadband everywhere, but being able to watch Rocky digitally is not in the top five. Second, the record business started breaking when the baby boomers hit 30. The introduction of the CD masked the problem, but it certainly wasn’t napster that did em in.
According to today’s New York Times, Valenti & Co. are making headway with a number of bills that have buried deep within them the means to allow Hollywood to criminalize many research and Internet activities. As I see it, there are a few perfectly simple concepts at work here:
1. It’s completely unproven that digital duplication of intellectual property decreases sales. In fact, as I demonstrated in Unleashing the Ideavirus it actually INCREASES sales.
2. It’s a fallacy that the government should make it a priority to protect companies that use public spectrum or the public copyright laws. They exist for the user, not for the corporations.
3. Criminalizing the Internet breaks it. In the long run, connecting people is far more valuable than making Spiderman VII possible.
4. Involving the government in enforcing these regulations distracts them from their real work and clogs the courts.
We need to expose these issues to a large number of voters. Congress will respond if they hear from us. Can you imagine Chuck Schumer or Dick Gephardt standing up at a big rally and claiming that they deserve to be reelected because they made it impossible/illegal to put a snippet of Star Wars into a Powerpoint presentation? Bragging about how they’ve filled the prisons with nerds who had the audacity to run an internet server without Jack’s approval?
PS, it’s not easy being a media mogul CEO who’s willing to try an alternative future. They fired Thomas Middelhoff as CEO of Bertelsmann yesterday. Middelhoff fired.
is
very good.
Ideas that are remarkable are much more likely to spread than ideas that aren’t. Yet so few people make remarkable stuff. Why? I think it’s because they think the opposite of remarkable is bad or mediocre or poorly done. Thus, if they make something very good, they confuse it with being virus-worthy. Yet this is not a discussion about quality at all.
If you travel on an airline and they do everything right, you don’t tell anyone. That’s what’s supposed to happen. What makes it remarkable is if it’s horrible beyond belief OR if the service is so unexpected (they were an hour early! they comped my ticket because I was cute! they served flaming crepes suzette in first class!) that you need to share it.
Are you making very good stuff? How fast can you stop?
July 11, 2002
For years, I’ve been predicting (fairly optimistically, it turns out) that there was a technology solution to spam, and when it got bad enough, we’d find it. It turns out that we need more than just a passive filtering system, though. We need to change the whole idea of email.
Email in its classic form is a public and open inbox, available to all at no charge. That’s busted.
The idea of charging for email is a simple and workable solution, but most players don’t have the guts to take the first step.
The new idea, though, is probably going to work. Close the open inbox.
Only let people with permission (don’t you love that term? I do.) into the box. If someone wants to write to you and they don’t have permission, the program hits them with an autoreply that tells them how to get permission. Spammers, of course, won’t be able to get permission and thus they disappear. You never see the program haggling with the stranger, you just see the requests for permission. You save hours a day.
There are plenty of new products coming out that use this method (most of them buggy and still not quite ready) but as they work out some business models, I wouldn’t be surprised to see it work. I hope it does!
What would the label look like?
Here’s what I’m doing with zoomTone Records (not quite ready to launch):
1. No retail sales. All on the Internet.
2. Big discount if you subscribe to the music. We send you a new album every six weeks.
3. No attempt at radio airplay. It’s too hard and it skews the music you make.
4. MP3s of everything available for free download.
5. Recorded on SACD, which plays in your CD player but plays even better in an SACD player. “Music worth paying for.”
6. Live to two track. No compression, overdubs, edits, etc. What you hear is what I heard.
7. Treat the musicians fairly. In this case, it means no options on future music, they own the masters and they get the cash when a record sells.
More as it happens! (sign up for more info at zoomTone)
June 26, 2002
